America’s SBDC Blog

A “Forbes 100 Best Websites for Entrepreneurs”

To License or Assign: An Intellectual Property Conundrum

By Mrigrank Mishra

Traklight_post_2015-02-02As a small business owner with intellectual property (IP), you have to leverage your assets to work for you. We have talked a number of times about the importance of protecting your IP and the necessary steps to achieve that end. The next step involves making the IP generate capital in more ways than just product sales. You may at times need to enter into an agreement with a third party with respect to that intellectual property. There are a number of different types of agreements that affect IP.


Just like tangible property, intellectual property can be conveyed, or assigned, to a new owner. If you are selling your business, you will need to convey the associated intellectual property to the new owner. Assigning IP entails transferring all rights associated with it to the assignee. You cannot then use the IP and claim creating it originally as a defense against infringement. Furthermore you cannot resell the same IP to another person if specifically mentioned in the agreement. Another scenario involving possible assignment is in the case of infringement. In many such cases, as part of a settlement, the party infringing the IP will be made to assign any rights it accrued to the rightful owner.

License Agreements

All types of IP can be assigned to others to use. With respect to patents, for instance, the inventor often never manufacturers anything. Instead, they license the patent to third parties to manufacture the product. They then collect licensing fees and, most likely, goes on to patent their next invention, repeating the process as much as possible. These agreements control how the licensor can use the IP, stipulate the fees associated with the license (if any), and assure that all use by the licensor inures to the benefit of the licensee. 

IP assignment and license agreements often contain indemnity clauses. This provision can be in many forms but the most common guarantees indemnity against infringement suits for using the IP. As an IP owner you must ensure your IP is not infringing anyone else’s rights as licensing it out will not absolve you of liability as most third parties will require indemnity clauses to protect them against liability. Copyright assignments do not really require indemnity clauses but assignees may still insist upon its inclusion.

Irrespective of how to manage your IP, any or all of these agreements need to be store in a secure location, easily retrievable at a moment’s notice. No third party will touch a startup unless they conduct their due diligence and find all company documents accounted for. Traklight’s IP Vault does just that. It is an online storage tool where documents can be stored and managed, and based on customizable access, be retrieved from anywhere, saving time and money. Each of the agreements described above is a perfect example of materials that would benefit from being loaded into your IP Vault.

This post originally appeared on the blog on December 31, 2014, titled “To License or Assign? An Intellectual Property Conundrum” by Mrigrank Mishra.

Traklight_logo_2014_w_captionMary Juetten, Founder and CEO of, developed the idea forTraklight while earning her JD and has leveraged 25+ years of business experience to globally launch Traklight in less than three years. Traklight is an innovative software company with a mission to empower you to be proactive in identifying, protecting, and leveraging your ideas for your startup, invention, or business. Through the use of online IP identification and storage tools and resources, Traklight users can protect their IP, and prevent infringement disputes and subsequent losses of large sums of money. Follow Traklight on Facebook, Twitter, or their blog

Monthly Archives